DTN Before The Bell Grain Comments

Morning CME Globex Update:

On the second day of this four-day trading week, grain prices are staying close to Tuesday's closes, not finding much fresh news to be concerned about. Temperatures are expected to warm later Wednesday, easing livestock stress and allowing for better travel conditions the rest of the week. At 8 a.m. CST, USDA announced 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19.

Other Markets:

Dow Jones:	Higher
U.S. Dollar Index:	Higher
Gold:	Lower
Crude Oil:	Lower

Corn:

March corn was up 3/4 cent early Wednesday, still not moving much with warmer temperatures and mostly dry weather expected across the Corn Belt through Saturday, less stressful for livestock and anyone that may want to move grain. In South America, this week's forecast is drier for Brazil than it has been in a while, but there are chances for moderate showers in southern Brazil and northern Argentina. Technically, the trend in March corn futures remains down, but commercials remain net long and cash corn prices have been steadily improving since mid-November. There is not much happening to change the minds of bearish traders this winter, but thanks to demand at these cheaper prices, prices appear to be slowly flattening out. DTN's National Corn Index closed at $3.16 Tuesday, priced 32 cents below the March contract and near its highest price in five months. In outside markets, the March U.S. dollar index is up 0.31 after RTTNews.com reported Europe's inflation at 1.4% in December, down slightly on the month and well below the central bank's target of 2.0%.

Soybeans:

At 8 a.m. CST, USDA announced 4.8 million bushels (130,000 mt) of U.S. soybeans were sold to unknown destinations for 2018-19. March soybeans were steady earlier, hanging on to Tuesday's gain with March meal a little higher and March soybean oil a little lower after April palm oil was down 1.2% overnight. Fundamentally, soybean prices should be trading lower with Brazil getting ready to harvest another large soybean crop for the sixth consecutive year. However, prices are not going down easily and the bullish turnaround in March soybean meal prices since making a new three-month low on Thursday is puzzling, as are the 97,040 net longs held by commercials. Technically, the trend in March soybeans remains down, but for now, the bullish market clues mentioned above weaken the bearish fundamental argument and present a confusing picture. DTN's National Soybean Index closed at $9.00 Tuesday, near its highest in a month and priced 69 cents below the March contract.

Wheat:

March Chicago wheat was up a half-cent early with single digit temperatures as far south as central Texas and a promise of gradually warming temperatures from here. Moderate rain amounts are expected from Arkansas to the Great Lakes the next seven days, but the southwestern U.S. Plains will remain mostly dry up to the Dakotas and eastern Montana. The issue of dry conditions in the western Plains remains a concern in early 2018 and may be offering some support to prices this winter. Otherwise, abundant supplies of U.S. winter wheat continue to keep prices near their lowest spot prices in eleven years while prices trend mostly sideways. DTN's National SRW index closed at $3.86 Tuesday, priced 31 cents below the March contract and down from its highest price in three months.

Todd Hultman can be reached at todd.hultman@dtn.com

Follow Todd on Twitter @ToddHultman1

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